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Oliver Wight Blog

Part 2: Four key steps to achieve global business transformation

By Rod Hozack, Partner at Oliver Wight Asia Pacific

12 September 2019


In Part One, we looked at ‘What is Global Business Transformation’ and the challenges businesses face. In this blog, drawing on Oliver Wight’s 50 years of experience in helping global organisations transform the way they work, we explain the four key steps to set an organisation up for global business success.

 

Step one: Defining intent
Organisations must first ask, what is it that they what to achieve as a result of the transformation process? Common motivations range from a reduction in global inventory, to streamlining processes and optimising decision making. One customer we worked with – a food manufacturer – wanted to optimise regional sourcing of a commonly used and essential ingredient, whereas a medical device company wanted to focus on reducing global inventory. While different organisations are likely to have different strategic intents (the aims and priorities), crucially, this must be unilaterally shared and supported by the business.  


Step two: Gathering background information
Organisations will need to define essential information which will shape the detailed design and deployment of the transformation. Pre-work is needed to define the ‘basics’, the immutable elements, which remain consistent for every single entity, and the discretionary elements, which are open to adaption. Organisational structure, number of sites, supply-chain mapping, and alliance partners also need to be sourced.

Certain elements that should be considered immutable by all organisations include minimum data requirements, information transfer protocols and timing, and reporting hierarchies. Other areas to align early in the transformation are planning levels and horizons, time fences for managing changes to plans, key process and operational metric definitions, and product and material numbering.


Step three: Mapping out the organisation
A lack of cross-organisational communication is a common problem in global organisations. Different functions have different pieces of the puzzle, but not the whole global process and this is symptomatic of functional silo-ism. This results in nowhere to source information on the business as a whole.  

To rectify this start with the basics by identifying the global organisation structure. Mapping the organisation not only lays down the groundwork for the structure of the organisation going forward, but often uncovers surprises along the way – both good and bad. It is crucial that every single entity is defined, including how the product flows from site-to-site. By mapping out the existing structure, organisations can form an accurate picture of their value chain and either reaffirm or change the intent, depending on what has been uncovered.

Mapping also extends to decision-making. Companies need to establish what decisions need to be made in the business to support the management framework, and then assign these decisions to the appropriate level – global, regional or local – and sort, medium, and long term.


Step four: Deployment & implementation
Every deployment has a different group of people that needs to be brought on the global transformation journey; this means always starting with the engagement of the local management team and following the same pathway and endpoint for every entity. Areas that can be accelerated include; templates, definitions, and ‘the immutables’, using the knowledge and experience gained from previous deployments, making it vital to have pilot sites to learn from and adapt the deployment approach, before ‘going big bang’.

Deployment must be carefully co-ordinated, with ‘people’ key to this – by transferring knowledge to people – as opposed to dictating information – they are empowered to motivate change. Ultimately, people are the catalysts for inspiring transformation and by educating people and explaining the purpose and rationale, they can gain the clarity to engage and personally invest in the process.

There also needs to be an element of ‘outside to in’, when it comes to the initial implementation. External assessment – often through an initial diagnostic – establishes an appropriate standard to make sense of processes, roles, responsibilities, rewards and so on. Without defined standards, people within organisations will make up their own.

Successful implementation also relies on the availability of the right resources and the engagement of each entity. As well as monetary budget, there must be a pool of internal resource to own and apply the transformation. Education is also vital, which will in turn drive appropriate changes in ways of working and the alignment of technology. The risk is starting technology installation too early or too late. Ideally, tools should be addressed in parallel to changes in behaviours, and ways of working.


To summarise, while global transformations are complex, they are not impossible and when deployed successfully, they result in tangible, measurable and continually improving results - reduction in inventory, process improvement and cost efficiency, increased profitability through increased agility, innovation and opportunity realisation as well as increased sales.

For more information on global business transformation read our white paper here.